All opportunities have a lifecycle
We’ve all heard of the product lifecycle. But it’s myopic to just focus on products. That’s because every product is the physical manifestation of a package of services.
The value in any product is the service it delivers. Over time the opportunity value of that service tends to become less relevant as the environment around it changes.
Some opportunities retain value over long periods, and therefore have a very long lifecycle, such as Coca-Cola. It has managed to remain relevant for over 100 years, whereas many tech products barely manage a couple years.
But eventually, every opportunity loses value. Even Coca-Cola will one day face obsolesce, as the value it delivers to customers gradually disappears. Every opportunity has a lifecycle.
A few years ago, I attended a lecture by Prof. J. Bruce Harreld of Harvard Business School. Prof. Hareld had studied companies all over the world, in all sectors, and of all sizes.
Remarkably enough, he found that only 1.7% of companies last more than 40 years. That’s only half a human lifespan. How long should companies be able to live? Theoretically, forever. There’s no reason that companies should ever die.
Prof. Hareld found that companies die because their opportunities gradually become irrelevant. Corporate leaders know this and are always on the hunt for new opportunities.
But unfortunately, even the largest most successful companies that rose to prominence with a great opportunity generally fail to choose great new opportunities, and fade into oblivion.
Why do even great companies fail to choose great opportunities? Prof. Hareld found that corporate leaders choose poor opportunities because they choose opportunities poorly. It’s a question of process.
Or more accurately, a lack of process. Although all the hundreds of business owners I’ve interviewed agree that the opportunities they choose to pursue are absolutely crucial to their success, not a single one uses a systematic process to choose them.
They rely on luck, intuition, or very often they avoid the opportunity search altogether and focus on milking their current cash cow until it literally runs out of juice and dies.
By using a systematic opportunity process, you can ensure that your business can identify harvest a continuous series of great opportunities and avoid being wiped out because of the lifecycle trap.